Betway Parent Reveals $4.75B Merger with SPAC Where NFL Commissioner’s Brother Is Director

Posted on: April 26, 2021, 12:47h. 

Last updated on: June 30, 2021, 08:49h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Super Group, the parent company of global online sports betting operator Betway, is merging with special purpose acquisition company (SPAC) Sports Entertainment Acquisition Corp. (NYSE:SEAH). It’s a transaction with a pre-equity valuation of $4.75 billion.

Super Group
The Betway brand featured on a footballer’s jersey. The betting firm’s parent company is merging with a SPAC (Image: Yahoo! Sports)

As part of its plans to capitalize on the rapid growth of regulated sports wagering in the US, Super Group also said it’s acquiring Digital Gaming Corp. (DGC). Super Group didn’t say how much it’s paying for DGC. The blank-check deal is slated to close in the second half of 2021, and following completion, the gaming operator will apply to list its shares on the New York Stock Exchange under the ticker “SGHC.”

The combination with SEAH will give Super Group access to the capital markets and a strong platform to accelerate its global growth strategy, as well as expansion into the fast-growing US online sports betting and gaming market,” according to a statement issued by the companies.

Sports Entertainment Acquisition raised $400 million in its initial public offering (IPO) last October.  Timothy Goodell, the brother of NFL Commissioner Roger Goodell, is an independent director at the SPAC.

While the rumor mill remains active, the Super Group/Sports Entertainment Acquisition announcement is the first in several months between a gaming entity and a SPAC. It follows a flurry of such activity last year, when several deals gaming operators and blank-check companies closed since the start of 2021.

Internet Gaming, Sports Betting Win Again

At a pre-equity valuation of $4.75 billion, Super Group’s merger with Sports Entertainment represents one of the largest combinations to date between a SPAC and a gaming company.

It’s also the latest sign that iGaming and online sports wagering are where expected growth is in the gaming industry – a trait analysts and investors are prioritizing. Goldman Sachs recently forecast the US online casinos and sports betting markets could be worth $39 billion and $14 billion, respectively, in 2033. For its part, Super Group, citing H2 Capital, says the global online betting and gaming market could top $100 billion in 2025.

The Betway unit is looking to capitalize on that growth. That operator entered the US earlier this year, taking its first bet last month. The acquisition of DGC brings added market access of up to 10 states, including Colorado, Indiana, Iowa, New Jersey, and Pennsylvania, and that could be applicable to both iGaming and sports wagering, according to the company.

Malta-based Betway has more than 60 brand agreements with athletes, leagues, and teams around the world. In the US, such accords include the NBA’s Brooklyn Nets, Chicago Bulls, Golden State Warriors, and the Los Angeles Clippers.

Impressive Financials

While some companies, including gaming firms, scuffle following SPAC mergers due to what markets perceive as shaky financials, Super Group is touting its outlook.

The operator forecast $1.5 billion of net gaming revenue (NGR) this year, with earnings before interest, taxes, depreciation and amortization (EBITDA) of $350 million. Those figures are expected to swell to $1.7 billion and $420 million, respectively, next year.

Following closure of the deal with Sports Entertainment, Super Group will have $200 million in cash on its balance sheet and no debt.